Novartis AG (NOVN) shares dropped roughly 14% in four trading days after the Swiss pharmaceutical company reported that two Phase 3 trials failed to meet their primary endpoints, dealing a setback to several key assets in its oncology and cardiometabolic pipelines.
On Sept. 4 after market close, Novartis announced that pelacarsen, a cardiometabolic drug targeting lipoprotein(a), missed its primary endpoint in the Lp(a)HORIZON trial, covering the drug's main indication. Two days later, on Sept. 8, the company reported that del-desiran similarly missed its primary endpoint in the HARBOR trial for myotonic dystrophy type 1.
Pelacarsen and del-desiran were among Novartis' most closely watched pipeline candidates. Morningstar had previously assigned risk-adjusted 2035 revenue forecasts of approximately USD 2.3 billion and USD 2.5 billion, respectively. Del-desiran originated from the company's USD 12 billion acquisition of Avidity in 2023.
Following the results, Morningstar removed both pelacarsen and del-desiran from its pipeline forecast. It also halved the forecast for del-brax, which shares a similar antibody-oligonucleotide conjugate modality with del-desiran but targets a different disease. Despite the setbacks, Morningstar maintained its wide economic moat rating and medium uncertainty assessment for Novartis, though it lowered its fair value estimate to USD 130 (CHF 105) from USD 140 (CHF 109). The stock now trades on the border of Morningstar's two-star and three-star ratings.
Novartis management said it continues to guide for a five-year sales compound annual growth rate of 5%-6% through 2030. The company has several other pipeline catalysts on deck, including full relapsing multiple sclerosis data for remibrutinib at MSToronto2026 on Oct. 21-23, a Phase 3 readout for remibrutinib in hidradenitis suppurativa, a Phase 3 readout for ianalumab in first-line immune thrombocytopenia, and a U.S. Food and Drug Administration decision on del-zota in Duchenne muscular dystrophy.
